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And Groupon spurned a 6-billion dollar deal from Google. Maybe they know something, maybe they don't.

jeremymims 13y ago
Today, Groupon's market cap is $6.88 billion. So, maybe it would have been smart to sell, but as of today, they're ahead. I have a feeling that company wasn't quite the disaster you think it was.
- minimaxir 13y ago
  That's really not ahead. http://en.wikipedia.org/wiki/Time_value_of_money http://en.wikipedia.org/wiki/Time_value_of_money
- JumpCrisscross 13y ago
  Not so fast. On 1 December 2010 (around when Google bid $6 billion for Groupon) the 3-year Treasury traded at 0.84% - thus $6 billion in December 2010 was worth no less than $6.2 billion today. If you put $6 billion into the Russell 3000 index on 1 December 2010, on the other hand, it would be worth $8.7 billion (14% more) today. Given that Groupon is a high-beta mid-cap stock, I would expect this figure to be closer to a fair baseline than the prior one.
- biot 13y ago
  Groupon raised "only" $700M from their IPO. Market cap != cash in the bank.
- cylinder 13y ago
  Have to consider if they were offered Google shares or cash. If GOOG, look at the value of Google shares now vs then.
thatthatis 13y ago
Even if we cede that Groupon would have had a better IRR for investors had they sold for $6bn; A move does not have to be correct with final knowledge to be correct with present knowledge.
- badman_ting 13y ago
  I know, I play poker :) My point is more that I don't think any information can be gleaned about whether rejecting this offer was a good idea from the fact of the rejection itself. You can look at this and say "Boy, they must know what they're doing to turn down that kinda scratch!" or you can look at it and say "They are crazy idiots."
  - thatthatis 13y ago
    The information that can be gleaned is that they internally value the company at a higher price. My argument then, is that given that think about their company 24/7 and that they have access to data that I do not that they probably have a reasonable basis for believing that their company is worth more than the offer. I further bolster my belief that their conclusions are reasonable with the fact that they have to justify their valuation to a board, many members of which represent IRR centric VC firms. From the fact that a VC backed company rejects any offer you can glean quite a lot of information. Its a fairly simple exercise of "what had to happen?" and "what would you have to believe?".

Today, Groupon's market cap is $6.88 billion. So, maybe it would have been smart to sell, but as of today, they're ahead. I have a feeling that company wasn't quite the disaster you think it was.

minimaxir 13y ago
That's really not ahead. http://en.wikipedia.org/wiki/Time_value_of_money http://en.wikipedia.org/wiki/Time_value_of_money
JumpCrisscross 13y ago
Not so fast. On 1 December 2010 (around when Google bid $6 billion for Groupon) the 3-year Treasury traded at 0.84% - thus $6 billion in December 2010 was worth no less than $6.2 billion today. If you put $6 billion into the Russell 3000 index on 1 December 2010, on the other hand, it would be worth $8.7 billion (14% more) today. Given that Groupon is a high-beta mid-cap stock, I would expect this figure to be closer to a fair baseline than the prior one.
biot 13y ago
Groupon raised "only" $700M from their IPO. Market cap != cash in the bank.
cylinder 13y ago
Have to consider if they were offered Google shares or cash. If GOOG, look at the value of Google shares now vs then.

thatthatis 13y ago

Even if we cede that Groupon would have had a better IRR for investors had they sold for $6bn; A move does not have to be correct with final knowledge to be correct with present knowledge.

badman_ting 13y ago
I know, I play poker :) My point is more that I don't think any information can be gleaned about whether rejecting this offer was a good idea from the fact of the rejection itself. You can look at this and say "Boy, they must know what they're doing to turn down that kinda scratch!" or you can look at it and say "They are crazy idiots."
- thatthatis 13y ago
  The information that can be gleaned is that they internally value the company at a higher price. My argument then, is that given that think about their company 24/7 and that they have access to data that I do not that they probably have a reasonable basis for believing that their company is worth more than the offer. I further bolster my belief that their conclusions are reasonable with the fact that they have to justify their valuation to a board, many members of which represent IRR centric VC firms. From the fact that a VC backed company rejects any offer you can glean quite a lot of information. Its a fairly simple exercise of "what had to happen?" and "what would you have to believe?".